Nissan May Ditch Renault Deal Over Sharing Technology With Geely
Nissan sees risks in Renault Chief Executive Officer Luca de Meo’s plan to merge the French carmaker’s combustion-engine operations with Geely.
Nissan Motor Co. is willing to walk away from a deal with Renault SA to re-balance their alliance amid concerns the French carmaker wants to license hundreds of jointly developed patented technologies to other players, including new Chinese partner Zheijiang Geely Holding Group, people familiar with the negotiations said.
While both sides appeared near a final agreement two weeks ago, Nissan's board and management have recently expressed concern over Renault's plans for the intellectual property, the people said, asking not to be identified as the information isn't public.
It includes some 500 joint technologies, one of the people said, among them expertise in areas such as autonomous driving, hybrid powertrains, solid-state batteries, safety systems, battery-management software and other know-how critical for developing self-driving, electrified vehicles.
Nissan sees risks in Renault Chief Executive Officer Luca de Meo's plan to merge the French carmaker's combustion-engine operations with Geely, the people said, and are seeking assurances that key technologies will be protected under any deal with the Hangzhou-based automaker, owner of Volvo and Lotus car brands.
Makoto Uchida, Nissan's CEO, said he was “surprised” there is speculation the IP discussion may derail the wider deal, but acknowledged technology was a “very important core asset for the alliance.”
“Of course there are areas where we have to say ‘this is our core technology,' and that needs to be protected,” Uchida said in an interview with Bloomberg News Friday. “That's my duty as CEO.”
Geely didn't immediately respond to questions from Bloomberg. A representative for Renault declined to comment. Greater Control Talks have been underway for months to reshape the two-decade-old alliance, which gives Renault greater control over its Japanese partner. Under the current plan, the French company will reduce its ownership of Nissan over time to 15% from the current 43%. In return, Nissan may be willing to invest $500 million to $750 million for a stake of about 15% in the new electric-vehicle unit that Renault plans to carve out, code-named Ampere.
“There are things that we can say and we cannot say yet because we haven't yet finalized,” Uchida said. “I'm having very close discussions with Luca. We respect each other, because I know that Luca has to make Renault much stronger, and he understands I have to make Nissan stronger. And of course most important is trust.”
Renault is scheduled to speak to investors on Nov. 8, when de Meo is expected to give an update on financial targets and the split-up plan.
“Renault, our partner, is going to have this capital markets day and that's what we have to support,” Uchida said. “And I want that to be successful.” Ghosn's Arrest The shift in ownership would alleviate an imbalance that's been a source of friction for years. Despite Renault's outsized stake, it's the smaller carmaker with 2.7 million of vehicle sales in 2021, compared with 4 million for Nissan.
The 2018 arrest of Carlos Ghosn, who was sent in to run the carmaking alliance when Renault rescued Nissan two decades ago, planted the early seeds for the re-balancing. The former chairman and chief executive officer, who denied the charges, escaped Japan in December 2019 while out on bail and is currently in Lebanon.
Although de Meo has indicated that he's willing to split up Renault with or without a deal with Nissan, the Japanese company disengaging might make it harder to get the signoff of the French state -- which owns 15% of Renault and holds double voting rights -- for such a transformative move.
Nissan's concerns mean it's unlikely an agreement on the re-balancing will be announced as planned in mid-November, when directors from Renault, Nissan and Mitsubishi Motors Corp., the junior member of the three-way alliance, are scheduled to meet in Tokyo, the people said.
‘Great Technology, Great Assets'
Another sticking point is the valuation of Ampere. The lack of a specific figure backed by data is making it difficult for Nissan to determine how much to invest for a stake in the new entity, which Renault wants to list publicly, one of the people said.
Uchida declined to comment on the timing of any announcement, or on the valuation of Ampere.
Under Renault's plans, Ampere would be based in France and employ about 10,000 people by 2023. The entity with Geely, code-named Horse, would also have a staff of about 10,000.
“We have been discussing how we can make the alliance of each individual company stronger under the difficult circumstances we are facing,” Uchida said. “That's how it started. We also wanted to speak about how the alliance could maximize the great technology and great assets that both companies have.”